Maritime Cyber Attacks: Changing Tides

By Kate B. Belmont

Front-page headlines revealing devastating cyber attacks on government agencies and the world’s largest companies have become a regular occurrence. Recent cyber attacks reported by the mainstream media include those against SONY, Anthem Health Insurance, the White House, the Office of Personnel Management, Ashley Madison, and even the Houston Astros.

As the list of companies and agencies that suffer cyber attacks grows longer, it is clear and undeniable that no industry is safe, and any company that relies on information and communication technology (ICT) must take the appropriate steps to protect itself against cyber threats. Although the maritime community has not yet garnered front-page attention as a victim of a recent cyber attack, make no mistake, the maritime industry is one of the most heavily targeted industries in the world and also suffers cyber attacks regularly.

Targeting the Maritime Community

Like many government agencies, as well as the aerospace and defense industry, banking and health insurance industries, and even the entertainment industry, the maritime industry is a prime target and has suffered, and continues to suffer, many significant cyber attacks. The maritime community has been able to avoid disastrous media coverage not because it is immune from cyber threats, lack of opportunity or that the industry employs cutting-edge cybersecurity programs and effective protocols to protect itself, but mostly because of luck, timing and our tight-lipped community.

The BP oil spill was not caused by hackers or cyber criminals, but it could have been, and such an event is likely to occur in the future. Yes, oil rigs are hackable. There have been multiple reports of oil rigs having been hacked, including at least one case where hackers were able to tilt the rig. Although no oil spill resulted, this should serve as a warning to the maritime community.

Likewise, the grounding and partial-sinking of the Costa Concordia appears to be the fault of human error, not because hackers manipulated the GPS, ECDIS or AIS. But all vessels that rely on e-navigation and GPS, ECDIS and AIS are susceptible to cyber attacks, and all such systems can be manipulated by hackers and cyber criminals. There have been recent accounts outlining how both airplanes and cars can be manipulated and controlled remotely by hackers, due to reliance on ICT.

Vessels are no exception. It is only a matter of time before the next headline of The New York Times alerts us to the recent grounding of a particular cruise ship, river-cruise vessel, ferry or container ship due to the hacking of the vessel’s e-navigation system.

Cyber threats are very real, and the consequences of a hugely successful cyber attack in the maritime industry would be disastrous. However, they have been occurring for years, resulting in mostly financial losses, as opposed to loss of human life or severe damage to the environment, which is of particular concern to the maritime community.

In addition to recent reports regarding the hacking of oil rigs and the manipulation of GPS, ECDIS and AIS, the bunkering community and many shipping companies continue to suffer tremendous losses due to cyber attacks. For example, in December 2014, a major maritime company engaged in a deal to order a sea floor mining vessel in China on the back of a long-term charter. The maritime company reportedly pre-paid $10 million of the $18 million charterer’s guarantee. Unfortunately, the company was the victim of a cyber attack as it unknowingly paid the deposit into a bank account that belonged to a cyber criminal.

The matter was promptly referred to police authorities, who pursued an investigation. In an effort to better protect itself from future attacks, the company also engaged a cybersecurity firm to ensure the ongoing security of its networks and to investigate the source of the attack.

Similarly, as recently as this past August, hackers stole about $644,000 from a shipping company registered in Cyprus. The Limassol-based company received an e-mail purportedly coming from its fuel supplier in Africa requesting that money owed be paid to a different bank account than usual. The company complied, only to find that it had been defrauded when it later received an e-mail from the fuel company asking for payment.

Cyber Regulations on the Horizon

Since the U.S. Government Accountability Office issued its 2014 report on maritime security outlining the maritime community’s vulnerability to cyber attacks, it has slowly begun to recognize, acknowledge and address the need for greater information-sharing and the need to develop maritime cybersecurity regulations and guidelines. While the industry does not currently have any cybersecurity regulations, change is on the horizon.

In 2015, the U.S. Coast Guard launched a year-long initiative to fully understand the cyber threats facing the industry with the ultimate goal of developing cybersecurity guidelines. Midway through their initiative this past June, the Coast Guard issued a Cyber Strategy, summarizing its vision for operating in the cyber domain. The Cyber Strategy discusses the Coast Guard’s approach to defending cyberspace, including risk assessment and risk management and the strategic priority of protecting critical maritime infrastructure, which includes ports, facilities, vessels and related systems that facilitate trade within the United States.

The Cyber Strategy offers a framework for the Coast Guard’s plan to operate effectively and efficiently within the cyber domain. In addition to the U.S. Coast Guard, the Round Table (RT) group, comprising BIMCO, ICS, Intercargo and Intertanko, is also developing standards and guidelines to address cybersecurity issues in the industry. Acknowledging that all major systems onboard modern ships (main engine, steering, navigation systems, ballast water, and cargo-handling equipment), are controlled and monitored by software and reliant on ICT, the RT group has committed to developing guidelines to assist the maritime industry to better protect itself from cyber attacks.

It is reported that the RT group is in the final phase of developing a pattern for the maintenance and updating of electronic systems. Angus Frew, Secretary General of BIMCO, is noted as saying, “The standards under development are intended to enable equipment manufacturers, service personnel, yards, owners and operators, as well as crew, to ensure their shipboard computer-based systems are managed securely and kept up-to-date to protect against the ever-growing threat from exploitation by criminals.”

Likewise, the IMO also has turned its attention to the very real threat of cyber attacks and the need for cybersecurity guidance and regulations. At the 95th session of the IMO Maritime Safety Committee (MSC), held this past June at the IMO headquarters in London, the MSC addressed the issue of cybersecurity extensively and agreed to work on guidelines on managing cyber-related risks on board ships and in port facilities at MSC 96.

Proposed amendments to the ISPS Code were discussed, but ultimately it was decided that more time would be needed to develop the appropriate guidelines, given the current ongoing work of the industry on cybersecurity, with the ultimate goal of submitting a draft proposal or set of guidelines to present and discuss at MSC 96.

Accepting the Reality of Cyber Crime

The maritime industry faces very real cyber threats and potentially devastating fallout from its failure to address and employ proper cybersecurity measures. While the industry has been somewhat hesitant to discuss these cyber threats, cyber attacks and subsequent losses, the reality of cyber attacks in the maritime industry can no longer be ignored or denied.

Accordingly, the industry is on the verge of great change. The leaders of the maritime community around the world have acknowledged the threat of cyber attacks and have begun to develop cybersecurity guidelines and regulations. In the interim, cyber attacks will continue to inundate the maritime community.

To avoid catastrophic losses and becoming another victim of cyber crime reported on the front page of The New York Times, it behooves all companies in the maritime industry to ensure they have the best cybersecurity protections available, and remain diligent in the fight against cyber crime. Cyber attacks are very real, and while regulations are on the horizon, cybersecurity protections are available to help guide us today.

Kate B. Belmont is an associate at Blank Rome LLP.

Source: Blank Rome LLP